Monterrey, Nuevo Leon, Mexico

December 2, 2002

[begin text]

Thank you very much Carlos for the introduction, and ladies and gentlemen, thank you for making me feel so welcome. I want to thank all of my hosts, especially Carlos Bremer and Javier Benitez. I thank my long time friend Governor Bob Miller from Nevada for being here. And I thank you for giving me the chance to come back to Mexico, and at least to look at the golf course. [LAUGHS] President Kennedy used to say that life is unfair, and he played golf too. [LAUGHS]

As many of you know, I actually came to Mexico on my honeymoon almost 27 years ago and I have enjoyed coming back many times since, but I think you should know how I came to be here today. In 1996, in the United States, I was running for reelection as President. I went to Las Vegas, where Governor Miller met me at the airport and Carlos was there with him and we were talking about the U.S./Mexican relationship. We were having a good time, so he came with me on my tour through the city. So he said, "I want you to promise if you win the election, you will come to Mexico City." I said, "Why not? I'm making promises to everybody now." [LAUGHS & APPLAUSE] So about a year later, I kept my promise to Carlos and I saw him in Mexico City.

So this time we're in Mexico City, he said, "Now I want you to promise to come to Monterrey," so here I am again. [LAUGHS] I feel fortunate that Carlos was not negotiating all of Mexico's trade agreements with the U.S. [LAUGHS] or we'd be completely broke by now. [LAUGHS & APPLAUSE]

Your great writer and my friend Carlos Fuentes once wrote that the greatness of Mexico is that its past is always alive. But as I come to Monterrey today, I think that the greatness of Mexico is also that its future is very much alive and that that may be the fundamental change, which has occurred in this great country over the last 10 years or so. Monterrey has a great number of homegrown multi-national companies, a great entrepreneurial spirit, a commitment to free trade. I think it's quite appropriate that Monterrey was chosen to host the U.N. Conference on development last spring, because I believe it is the symbol of Mexico's future development.

I tried to do my part when I was President to be a good partner to you and for your future, with two of the most significant decisions of my presidency. The first, of course, was passing NAFTA. As you know, in 1992, our former Presidents, President Bush and President Salinas negotiated NAFTA. And then we had to get the public, in America's case, the Congress, to support it. It was much harder than I thought it was going to be, because of all the dire predictions of NAFTA's opponents, about what it would mean for jobs to the environment in America. It was harder for me because a lot of people who were saying all the bad things about NAFTA had just a few months earlier been telling everyone they should support Bill Clinton for President. And I was confronted with one of the most difficult and unpleasant, but important responsibilities of leadership. I had to disagree with friends and supporters whom I thought were wrong.

Well now we have eight years of experience with NAFTA and enough evidence to draw some conclusions. All the NAFTA commitments are scheduled to be fully implemented in 30 days, on January the 1st, 2003. So some benefits to both our countries are still being phased in, but we know that already Mexico is getting nearly 3 million jobs, just between the signing of NAFTA and 2000; that Mexican exports to the United States and Canada increased 225%, compared with 93% for the rest of the world; that Mexico's export growth accounted for more than half the increase in real gross domestic product between 1993 and 2001; that your export sector was responsible for more than half of the growth in manufacturing jobs in that period, with export related jobs paying almost 40% more then other manufacturing jobs.

So clearly NAFTA has been good for Mexico, but it has also been good for the United States. Our merchandise exports to Canada and Mexico increased by almost 100% between 1993 and 2001, compared to an export increase of 44% for the rest of the world. And our imports from Mexico have enabled us to keep growing without inflation. Moreover, by helping our trading partners to improve their own economic health, we have strengthened democracy and cooperation in our hemisphere.

Today Mexico and Canada are America's two top trading partners. And during most of the last decade, our trade with Latin America as a whole, grew faster than with any other region in the world, leading us to commit to developing a free trade area of the Americas early in this new century. So NAFTA was clearly the right decision.

The second big issue relating to Mexico, of course, came when the peso plunged. Investors were scared. They began pulling out of economies throughout Latin America. The crisis of confidence was felt as far away as Poland, Hungary and the Czech Republic. Mexico had about $45 billion in debt payments coming due, and about $3 billion in foreign reserves. This was a source of great concern in America, to me and to my economic team, headed by Bob Rubin and Larry Summers of the Treasury Department. One night they came into the Oval Office to see me, along with my Chief of Staff, Leon Panetta and my National Security Advisor, Sandy Berger. And Bob Rubin said, "Mr. President, Mexico has about 48 hours left as a functioning economy. If nothing's done, the cost of paying back borrowed dollars for them will triple in just a few days. It will bankrupt a huge number of businesses and send the Mexican economy into free-fall. It will create a crisis of immigration. It will be very damaging to the other economies of Latin America and indeed the developing countries all over the world." We had seen this coming and I had asked the Congress to support action to alleviate this problem in Mexico.

And both the Republican and the Democratic Congressional leaders said they would support me. But then that morning in the morning papers, there was a public opinion poll, which said that the American people were against my loaning money to Mexico by 81% to 15%. All of a sudden the Republican Congressional Leader said they couldn't deliver me any votes. That no one is going to vote against that 81% public opinion. Then my own political advisors, who were mostly young people who thought these polls meant something, said, "Well, you can't do that either if you have no Republican support and the public's against you by 81%."

So here I was at night, alone in the White House, getting this advice. Bob Rubin says, "Mexico's economy has 48 hours left." My political advisor said, "If you want four more years, you better not loan the money." [LAUGHS] Actually I thought it was a pretty easy decision, because I knew the American people hired Presidents to make decisions that were good for the country and that in areas of foreign affairs and international economics they expect you to know more than they can possibly know. They weren't hostile toward the Mexican people in the poll, they simply thought, "Well, if you give money to somebody who's in trouble you probably won't get it back." That's all they knew, and I knew they were wrong.

So I told my young political advisors, I said, "Now a year from now when we don't give this money, and the Mexican economy's in disarray and instead of being our friends, the Mexicans are mad at us. And instead of having a stable situation on the border, we've got another million or two million illegal immigrants. And instead of having a partnership in fighting narco-traffickers, we've got even more drug dealers coming up from South America establishing bases in Mexico because it's so poor and things are a real mess. And they asked me, 'President Clinton, why did you allow this mess?' What am I supposed to say? Well, there was a poll in the morning newspaper that says 81% of the people were against this loan." And so in about a 10-minute meeting I authorized the loan and the rest is history.

We put together a $50 billion international loan package. America put in a $13.5 billion emergency loan. It was the biggest foreign financial commitment the United States had made since the Marshall Plan, after World War II. [APPLAUSE] So in December of 1995, President Zedillo came to the White House and after the worst was over, we had a press conference. And a reporter asked me, I think it was a Mexican reporter, he said, "President Clinton, you took some personal risk on this financial package. In politics, no one ever does something for nothing. What do you want back from Mexico?" [LAUGHS] The question was so blunt, everyone laughed. But I can tell you, all I wanted back from Mexico was a chance to have a good partner in the 21st Century.

Mexico put in place a tough adjustment plan to get its economic house in order. In the year after the crisis, your economy grew by 5%. The exchange rate stabilized, inflation was cut nearly in half. Almost a million jobs returned and Mexico regained re?confidence of international investors. It was so much different than in the previous crisis back in 1982. After 1982, it took Mexico seven years to return to private financial markets. This time, it took seven months. I think the reason is, in 1982, Mexico was going it alone in an isolated way. In 1995, we did it together and Mexico had made a commitment to being a full partner in the global economy. In 1982, Mexico imposed tariffs when U.S. exports fell by 50%, this time Mexico and the United States fulfilled our commitments under NAFTA.

When we kept our markets open, it allowed Mexico to take advantage of the favorable exchange rate and began rebuilding your economic strength through exports. Without NAFTA, we might have repeated the problems of 1982. So on January the 15th, 1997, a day I will always remember, just five days before I was inaugurated to my second term. The phone rang in the Oval Office and it President Zedillo on the phone saying that America was about to get its last repayment from Mexico. The final $3.5 billion of the $13.5 billion loan, plus several hundred million dollars in interest, was being repaid three years early.

Sometimes I think how much money I could have made in commissions on that loan. [LAUGHS & APPLAUSE] But there it was, less than two years later, the loan paid back three years ahead of time with interest, because of the Mexico support package and NAFTA and the way they work together. There was evidence of two things that I believe very strongly. One is that in an increasingly interdependent world, it is very important, not just to you, but to America that you succeed. And the second is, I knew if you were just given a chance, you would succeed.

That brings me to the main point I want to discuss today. The story of what we have done together over the last eight years is an example of positive interdependence. We know we cannot escape each other's future. We share our own border, a common history, increasingly a common economy. The fastest growing group of immigrants in America are Mexican-Americans, but the relationship between the United States and Mexico increasingly is just an intense example of the larger forces, economic, political, cultural and technological, that are bringing the whole world closer together.

We are open to one another to an extent never before known in human history. While it is true that 100 years ago, the U.S. economy was as dependent on trade as it is today. And it is true that 100 years ago, we had a lot of immigration. There has never been the integration in societies that we see today, because of trade and immigration and travel and information technology and culture. We have never had all these things bringing the world closer together as they are today. Now this interdependence can be a very positive thing for people in position to take advantage of it as we have through NAFTA and our other common endeavors. But as we learned in New York City and Washington and Pennsylvania on September the 11th, when 3,100 Americans were murdered. 3,100 Americans and people from 70 other countries, including over 200 Muslims, were murdered on September 11th in the United States.

As we see everyday in the Middle East, as Mexico experienced with the problems in Chiapas; with the problems with narco-traffickers trying to move into your country and take over big areas. If you live in an interdependent world without shared values and shared benefits and shared responsibilities, a lot of bad things can happen too.

Suppose we'd walked away from the opportunity to have a loan? Suppose we'd walked away from our NAFTA commitments? We would have been no less interdependent, it's just that the interdependence would have turned from positive to negative consequences, because we no longer have shared values, shared benefits, shared responsibilities. This is the main point I try to make every time I talk to anybody in the world today. Most of us are doing pretty well in an interdependent world. But we cannot settle for interdependence. We have to build an integrated global community which mirrors the progress we have made in working through our problems and getting rid of our past conflicts between the U.S. and Mexico in developing a future with shared values, benefits and responsibilities. If you have interdependence without an integrated community then at the very list life is more confined and uncertain and at worst, it can be deadly.

The Middle East is the best example in the world of interdependence. The Palestinians and the Israelis are completely interdependent and when they work together, they both get richer and when they set off bombs and retaliate, they both get poorer. But whether something good or bad is happening, they are completely dependent on one another for their future.

For eight years, I tried to move the world toward a more integrated global community. It is, as I look back on it, on all the things that we did right and all the things we couldn't do that we tried to do, I still believe it's the great work of the 21st Century. And I think when you think about the kinds of things you face, how much you're producing for the Mexican market, how much for the American market and how much beyond those borders. How you're going to compete with the Chinese, with their labor culture even lower than yours. You think about all these kinds of questions you face.

They are basically what I used to call in the White House, "high-class problems." They're the problems of free people given a chance to create wealth and opportunity, give other people jobs, give their children a chance at a better future. They are the challenges of a world that is positively coming together. And those kind of problems will always be with us, but that's a lot better than trying to figure out how you keep your airport from being blown up or chemical weapons released in a crowded building, or biological agents being released by terrorists in a dense tunnel somewhere.

So what we have to do, in my view, is to be thinking of all of the issues that come down the pike, within the framework of this big question. How do we create a global community? How do we move from interdependence to integration based on shared values, shared benefits and shared responsibilities?

Now very briefly, I think there are more things that have to be done. First, there has to be a security strategy. We cannot convert everyone. There has to be a security strategy to deal primarily with the most dangerous threat, of terror weapons of mass destruction and organized crime. I support the President Bush's decision to leave our troops in Afghanistan until we eradicate the al-Qaeda network entirely. I still think, as I told him when I left office, this is the number one security threat in the world, and I think we should put more troops in Afghanistan and wherever else we need to, because this is the most dangerous, global terror network.

I support doing more to help our friends from the Philippines to Indonesia to Columbia to fight terror. I was in Columbia in late June to support the incoming President, Mr. Uribe, and outgoing President Pastrana in trying to convince the business community there to stay in Columbia and stay with Columbia. I established, along with the Republican Speaker of the House, Dennis Hastert, in my last year as President, the Plan Columbia to help them fight the narco-traffickers. I supported President Bush in expanding the use of that money. We cannot afford to lose Latin America's oldest democracy. So we should do that. I support better homeland defenses in the United States, better intelligence, better accountability, stronger protection for our water and transportation system, our tunnels, our ports, our hospitals. And I support better use of information technology.

In addition to that, it is important that we do more to stop the production of weapons of mass destruction, chemical, biological and nuclear weapons. And I don't want to scare you, but for example, if you have a piece of fissile material about the size of this glass top, just the top of the glass, you can put it in a conventional bomb and have a bomb big enough to blow up 25% of Washington, D.C. If you have enough fissile material to fill an average sized bag, about like this, you can make a gum bomb that, if it's one kiloton, it could kill 200,000 people in New York City. It could be as big as 10 kilotons and kill and maim people.

When I was President, we spent a lot of American tax money trying to make sure that never happened. We worked with the Russian government to get strict control over all the Russian weapons and nuclear stocks. We got all the nuclear weapons out of the other countries that were part of the Soviet Union, put then back into Russia and started destroying them. We agreed with the Russians to destroy 50 tons of plutonium each. We did a lot of good things, but we've still got a lot to do. We have to keep at this.

There were years when American tax dollars paid for half of the 40,000 Russian biological, chemical and nuclear scientists' work, so we could keep them doing something positive instead of being tempted in a bad economic time, to go to work for terrorists. That affects you and every other civilized country on earth. We should do more of that.

North Korea recently acknowledged that it was using its laboratory facilities to try to develop a nuclear weapon with highly enriched uranium. In 1994, shortly before we'd made the decision on the Mexican loan day, we came, I was afraid close to war with North Korea. I authorized military action against them if they didn't stop the plan to use plutonium from nuclear fuel rods to build six to eight nuclear weapons a year. But they stopped building the weapons. Then they stopped testing long-range missiles and we almost got them to stop building them. You have to understand, North Korea is a very unusual country. It's the most isolated country in the world. They can't feed themselves. When their soldiers defect to South Korea, they usually weigh less than 100 pounds, but they are very good at building missiles and bombs. It's a strange situation, a country can't grow food, but their cash crops have been missiles and bombs.

So they don't necessarily want a nuclear weapon to blow them up. They want nuclear power to get respect and leverage in the world. I think the Bush Administration is handling this right. They're working with the Japanese, the Chinese, the Russians and the South Koreans and saying, "Look, if you want to come into the world, you have to stop this. And if you don't stop it, we'll stop helping you." But this is a big issue and that brings me to the question of Iraq.

Several of the people in the audience today said, "I hope you will say something about Iraq," so here goes. [LAUGHS] As of the Gulf War in 1991, Saddam Hussein promised the United Nations that he would destroy all of his existing stores of chemical and biological weapons, the stocks necessary to make them and any laboratory facility that could be used to make nuclear, biological or chemical weapons. Then during my time as President, there was this elaborate inspection process, which led to the destruction of huge volumes of these weapons and the stocks, far more then were destroyed in the Gulf War. Even though Saddam Hussein was lying and shifting around all the time, it still worked far better than those people knew.

Then in 1998, in a bid to get the United Nations to lift the sanctions, he kicked out the inspectors. And when he did, we and the British bombed all of the sites we knew he had nuclear or chemical or biological work going on and several we suspected. But now he's had four years to rebuild. I have no doubt he's tried to rebuild and something needs to be done. The United Nations has passed a resolution calling for unrestricted inspections. That is exactly what needed to be done. I did not want the United States to attack Iraq unilaterally, because I thought that would have been a mistake. We are at a unique moment in history, where we are the world dominant political, economic and military power, but we should be working toward an integrated global community, toward the kind of world we would like to live in as Americans when we are no longer the biggest economy on the block and therefore, going through the U.N. was very, very important. Now I think it's important that we do this work and do the inspections and I think that a military conflict can be avoided. If it isn't, at least we'll have shared responsibilities, and that's an important part of building the kind of world we want. Now let me make the second point. So we do need a world with a security policy. We'd be nuts not to have a security policy. There are people out there who will do anything to wreck the world you are trying to build, but we also need to recognize that in an interdependent world, a security policy alone will never be enough. Why? Because unless you can kill or put in jail every one of your opponents, interdependence will leave you insecure unless you make a world with more partners and fewer terrorists. Essentially that was what was done after World War II with the Marshall Plan. When we rebuilt Europe and Japan and built a world-trading system and the international financial institutions, a world with more partners and fewer terrorists.

I just came back from Africa. I was working with my foundation there. I saw what a little work could do. And I'll just give you one example. I was in Ghana, where I'm working with a great Peruvian economist Hernando De Soto, to try to help do there what he tried to do in Peru and bring the assets of poor people into a legal system where they could be used as collateral for credit. So I was on the way out the door in Ghana, and on the way up to the airplane. And this woman comes running up to me waving a shirt. She said, "This shirt was made in a factory with 400 Ghanaian men and women, because you President Clinton got the Congress to adopt the Africa-Caribbean Trade Bill and you opened the markets of the U.S. to Africa. And because of that, 400 of us have jobs, so we have jobs, "Here's your shirt." [LAUGHS & APPLAUSE] I looked at that shirt before I came down here today and here's the point I want to make.

That woman does not want bin Laden to succeed. She's not mad at America. She doesn't resent the economic success we've had. She doesn't want her children to be mercenaries or terrorists. Why? Because she feels that she's a partner in our move to the future. That's what NAFTA was about, that's what the economic assistance package was about, that's what the idea of the free trade area the America's about. That's what all this is about. So I just will make that point.

And the same thing is true if you're talking about the United States helping fight AIDS, TB and Malaria; helping the 130 million children in the world who are not in school to go to school; developing the economies of the poorest countries. It doesn't cost much money. It's far cheaper than defense and it has a massive, massive payback.

You know, most Americans believe we spend 10 to 15% of our income on foreign aid, and in fact we spend less than 1%. At the Monterrey Conference here, we've talked about going from $10 to $15 billion a year, $5 billion in foreign assistance over three years. The administration requested a $70 billion increase in defense and homeland defense in a year. We could double or triple our foreign assistance for programs we know work and do a lot more to build a world with more partners and fewer terrorists, people like the woman in Ghana.

I'll just give you just one other example. In 2000, the United States led the GA and the Millennium debt relief initiative and we said to, so far 25, but eventually 32 of the poorest countries in the world, "We'll forgive your debt, but only if you put all the savings into health, education and economic development." So they did that. So what happened? Uganda doubled its primary school enrollment. Honduras went from six years of mandatory schooling to nine. In a developing country, every single year of schooling, every year adds on average 10 to 15% to the income of the boy or girl who gets it. On balance in Latin America, East Asia and Africa the countries that got debt relief, had increased health spending and education spending by 70% as a result of this debt relief. We know how to do this, and we should take a little time to make a world with more partners and fewer terrorists.

The third thing we should do is to build up the strength of the international institutions. That's why the decision President Bush and Secretary Powell made to go the U.N. on Iraq instead of go on our own was so important. And this whole area is where one of my areas where I have the greatest disagreement with the current administration. I think we should not have withdrawn from the Comprehensive Nuclear Test Band Treaty, or the International Criminal Court, or the Kyoto Agreement on Climate Change or the effort to strengthen Biological Weapons Convention.

I brought America into the World Trade Organization. We started with the Summit of the Americas Meeting for the Latin American leaders again, the United States. We stared meeting the Asian Pacific leaders every year again. I tried-- We expanded NATO. I tried to build institutional cooperation. I believe the United States should be in the center of institutions of cooperation, not walking away from them.

Now if you do that, sometimes decisions will be made you don't like. The World Trade Organization, every now and then would make a decision that would drive me crazy, that I literally hated, but I always knew we were better off inside than outside and that if we didn't stay in, there'd be no incentive for anyone else to stay in when the going got tough. So we need institutional cooperation.

And the fourth thing we need to do, and this is the last point I want to make today, then I'll answer you're questions. We need a security strategy first; second, a strategy for more partners and fewer terrorists; third, support for international cooperation; and fourth, we need a strategy to change the minds and hearts of people so that they actually want to live in a global community where our common humanity is more important than our interesting differences.

And let me say what I mean by this. For most of the, of all human history, people have defined themselves not just by who we are, but by who we aren't. You all do it. "I'm a man, not a woman." "I'm Christian, not a Jew." "I'm a Catholic, not a Protestant." "A Mexican, not an American." Everybody does that and sometimes we do it in very explicit terms that are not so good. How many times have you ever said to yourself, "Well, I may not be perfect, but at least I didn't do that." [LAUGHS] "At least I'm not like him." We all do this, right? This has been the dominant form of thinking throughout all of human history, with grave consequences.

The French and the Germans fought each other in Europe for two centuries and by World War II nearly destroyed civilization. Fifty years later, they are the pillars of cooperation in the European Union.

And the country of my people, Northern Ireland, the Catholics and the Protestants fought each other for decades, and finally they decided it was stupid and they stopped. I could give you lots of other examples, but the point I want to make is that for most of human history people have defined themselves by negative reference to others, whether it was clan or tribe or country or religion. In the 30 years or so I was in politics, I knew a lot of people that I was, honestly I was convinced they would have been miserable unless they had someone to hate. [LAUGHS] If they didn't have an enemy, they just made up one. [LAUGHS] Besides that it's good politics. It's good politics to have an enemy. Nothing unites us so much as sense of common threat and sometimes it's real, as we see and deal with terrorism.

But the point I want to make is this. If you look at all of human history, it's basically been a race between the impulse to cooperate and the impulse to conflict. And from the beginning, people have enjoyed wider and wider circles of interdependence. So we have had access to greater potential from human contact, and at the same time, technology has given us the ability to kill more people in less time. So in the first 50 years in the 20th Century civilization was almost wiped out through two world wars and the horrible slaughters in China and the former Soviet Union. So then what happened? We had the U.N. Charter and the Universal Declaration of Human Rights coming in 1945, saying we actually could have global community, but everyone knew we couldn't because of the Cold War. Then in 1989 the Berlin Wall falls. And you may say, "Yes, and since then we've had nothing but religious wars and the AIDS epidemic and all this ethnic cleansing and terrorism." That's not true.

Look what's happened in the 13 years when we had a chance to have a global community. Just look what has happened. The European Union has been formed, a commitment to this hemisphere to a free trade area in the America's has been made. We did NAFTA, Russia and China have been reconciled to the west. NATO has been expanded. Every nation in Latin America was one as a democracy. We have all these efforts in our area to come together.

Just when I was President, we did the Free Trade Area of the Americas. We did the Summit of the Americas. We did Plan Columbia. I worked in the water conflict between Ecuador and Peru. We gave financial assistance to Mexico and Brazil. We restored democracy in Haiti, preserved it in Central America and Paraguay. Worked for free speech in Venezuela, did a lot of other things.

The point I'm trying to make is, the headlines of the day are always about the negatives. But if you look at the big issues, it is astonishing, how much the world has done to come together in the last 13 years. That's why you're here, presumably that's why you asked me to come down here to give this speech.

So I want to close by saying this. We have to develop the habits of mind and heart that led at least the world to the kind of cooperation that the United States and Mexico have tried to practice in the last few years. It is very hard. Ghandi, the greatest spirit of my lifetime, was killed by a fellow Hindu because he wanted India for the Muslims, the Christians, the Jews, the Janes, the Buddhists, everybody else. Sadat was killed in Egypt by an Egyptian, because he wanted peace with Israel. Rabin was killed by a fellow Israeli, who thought he was a bad Jew and a bad Israeli because he wanted Palestinian children to have a homeland to grow up in and a shared future.

But the truth is that once you're interdependent, you have to find a shared future. You have to share benefits and responsibilities and values, there is not other option. When I came to Mexico in 1997, I visited the tomb of Mexican cadets who died at the hands of American troops, almost exactly 50 years after President Truman had done the same thing. He was asked why he went there, and he said [and I quote], "Because I respect bravery wherever I see it." The world needs bravery today, but not the bravery to kill those who are different. But the bravery to risk seeing beyond the differences to our common humanity and our common future. That's what we need.

Politically, it is the single most important job of the 21st Century. If you think about everything you do, it depends upon the positive forces of interdependence overcoming the negative forces of interdependence. Everything you want economically depends upon our moving from just interdependence, which can be good or bad, to a more integrated community where we have shared values and benefits and responsibilities and we can all do our part. But in the end, it comes down to recognizing that our common humanity is more important than our interesting differences.

When I was President, I tried to see that Mexico and the United States would lead the way towards that sort of world. I hope I did a little of that good in that direction. And I hope that all of you will remain strongly committed to it. Thank you very much. [APPLAUSE]

QUESTION & ANSWER SESSION

QUESTION: Thank you, Mr. President. We have a few questions for you sent in from our friends and customers and neighbors. The first one is, "What motivated you to run emergency loans to Mexico like in the 1995 financial crisis?" I think you already answered this one, so I want to thank you from everybody for your work on those.

The next question is, "What are the areas of opportunity that you see in Mexico?"

PRESIDENT CLINTON: Well, I think first of all, what I would like to see in Mexico and if I were around here working in a different capacity, I would be trying to do two things. I would be trying to think about how to accelerate non-trade-related problems in Mexico. How much internal economic development can you have? How do you balance the growth of the country, not just in the places where you're doing well now, but where there's a lot of human potential or natural resources? What needs to be done in terms of education, training, infrastructure, investment, legal changes, whatever to generate more internal economic development? That's the first thing I'd think of.

Then the second thing I would think about is, what can be done to plan for the long-term, for the (inaudible) region and the whole NAFTA related business. I know there's a lot of concern about some Mexican manufacturing being undercut by Chinese and lower costs. I think there needs to be a pretty clear-headed analysis here. If their labor is cheaper and they can overcome the transportation enrichments, because they ship by water, then you either have to improve productivity or beat them on quality or produce something else. There aren't any options there and there needs to be a systematic effort to figure out.

People should be working together in this and the United States should be working together with you too, because we have a huge stake in the success of not just NAFTA, but our whole political and economic relationship. I also believe because of the climate, I think that-- I think one of the things that I would be doing if I were here and had any political influence or economic influence, I believe there is an enormous opportunity for Mexico to manufacture anti-pollution equipment, alternative energy conservation materials and technology and clean energy technology.

I believe there will be a huge move around the world over the next 20 years to do more with solar energy, for example, do more with other sources of clean energy. to do more of the things that will deal with the problems of air pollution. But there is already about a $1 trillion on tap market out there and so if I were an economic czar in Mexico, I'd be trying to figure out how I could make that stuff and sell it like crazy. And I can tell you that you won't have to compete with the Chinese, because they still are in a position where they're about 10 years behind where they need to be, and thinking about this energy issue. They still think the only way they can get rich is to put more coal into the waters and put more greenhouse gases into the atmosphere. It's a great opportunity, I think for you to deal with the environmental and energy issues of the day and a way to generate potentially hundreds of thousands of jobs at the (inaudible) and give you a big market share.

QUESTION: Thank you. Mr. President, can you give us your view of Mexico as a trading partner to the U.S.?

PRESIDENT CLINTON: I think we've done pretty well. Both of us have had a couple of very tense issues in NAFTA because of the domestic, political constituencies that were affected by the agreements we made and that is to be expected. On balance, this thing's been a roaring success I think for both of us. And I think we've by and large, kept our word and we've by and large gone in the right direction, on both sides. So I think we should be looking for ways to broaden this economic partnership, not narrow it. And I also think we should be looking for ways to kind of accelerate the creation of a more regional trade cooperation, this movement toward the Summit of the Americas, our trade agreement. I think on balance, it's very good. I also think that we have to recognize that all economic integration is limited or intensified by internal development. So I think a lot of attention needs to be paid, I will say again, to the potential for Mexican troubles increased internal development. Because I think if you have greater internally generated growth, it would actually increase your capacity of growth through trade. I think the two things would work together.

QUESTION: And before the final question, we want you to ask maybe not too much to make another promise to come back, (inaudible) and everyone here. [LAUGHS & APPLAUSE]

PRESIDENT CLINTON: You finally asked me to do something that was easy. [LAUGHS] I'll do that.

QUESTION: The fourth and final question is, what can you tell us about China and its new role with the world (inaudible)?

PRESIDENT CLINTON: Well look, China has about 1.2 billion people. And the world has a little over 5 billion people. So they have approximately, you know, 20-25% of all the people in the world. That's a lot of folks. [LAUGHS] Now they're well organized. They're smart and they're eager. They have a political system that is still I think too controlled in some ways. But it is moving toward greater openness and liberalization and they have made the commitments to make the internal changes necessary to be a full member of the World Trade Organization. They are, as you know from experience, they're very difficult competitors and they have large numbers of people who will work for very little pay. And in certain areas of production they have an enormous advantage. However, they will do what other countries have done. They will look for opportunities to go into more and more sophisticated production as __ per capita income of the country and the standard of living of their people. And you just have to figure out, you can't make them go away, because they're well organized and they're well disciplined and they're in the World Trade Organization. So you have to go out and you have to figure out how you're going to respond. If you think they're doing something illegal, you should challenge it, as we do from time to time with pirated CD's, for example.

Now again, I will say, I think the most important thing is, figure out which areas their labor cost advantage is not decisive, increase productivity there. Look at what quality options you have and if there's someplace you can't possibly win, and what they're doing is perfectly legal, then move to produce something else as quickly as possible. You still have Mexico. It's still going to have comparative advantage in production in a huge number of areas no matter what the Chinese do. They can't possibly produce and sell everything for the American market, the Latin American market, the Native market, the European market. You're still going to have lots of options, you're just going to have to be, I think get much more information and be prepared to change much more quickly. And think about, I'll say this again.

I still think you have lots of opportunities for internally generated economic growth that will support your trade strategy. And I think a lot of very serious attention should be given to that by both business leaders and government leaders, figuring out how you need to change laws and need to get more incentive. What kind of investments you can get from outside the country of your internal growth and not just your trade growth. I think, you know, you have a whole different standing in the world than you had 10 years ago.

I think you have no idea how Americans feel now because of the way you paid the loan back and the way you've done things. I just think you have a lot more options in the face of the Chinese challenge than you think you do. And let me just say this, you should actually be as-- As citizens of the world, you should want the Chinese to do very well, because you've got to be competing with them economically than wondering whether they were going to start the Third World War. The fact that they are integrated into the institutions of the world and see their future in terms of economic achievement, and cultural achievement, and scientific achievement, political leverage within the United Nations, I think is a very, very positive thing. [FEW CLAPS]

But I think you ought to also think about doing joint ventures with them. You also ought to think about, who can compete with them. Is there someway you could do joint ventures with the Indians, for example. There are lots of options here you can pursue. But never forget to look at what's right before you. Sometimes we forget about opportunities we have right at home, to have economic growth and economic avenues of expression that we have not fully developed. Anyway that's my take on it, but I think on balance, I know it's a problem for a lot of people right now. We're on balance to the fact that China is growing, it's growing within the framework of the world community has to be good for all of us. And so we've just got to find a way to respond so that you get your fair share too. Thank you. [APPLAUSE]

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